Madagascar

Taxable period

The financial year may be spread over any period of 12 months. There is no need to obtain prior authorisation in order to close the financial year on a date other than 31 December or 30 June.

Tax returns

CIT returns are due before 15 May each year for companies whose financial year ends at 31 December, before 15 November each year for companies whose financial year ends at 30 June, and no later than the 15th day of the fourth month from the date of closing of the financial year for all other year-ends.

Taxpayers having annual revenue of more than MGA 200 million must file annual financial statements online.

Payment of tax

CIT is payable bimonthly in provisional instalments. The balance is payable before 15 May each year for companies whose financial year ends at 31 December, before 15 November each year for companies whose financial year ends at 30 June, and within four months from the date of closing of the financial year for all other year-ends.

Taxpayers can decide to suspend the payment of bimonthly income tax instalments, but they must pay a penalty of 80% if the final tax due is more than the previous year's income tax. However, if the amount actually due is less than the instalments paid, the overpayment entitles the taxpayer to a tax credit that can be applied to taxes of the same kind.

WHT on foreign services is payable to the tax authorities before the 15th day of the month following the payment.

WHT on purchase of goods and services from non-registered suppliers is payable to the tax authorities before the 15th day of the month following the payment. 

WHT on interest and on payments to members of boards of directors is payable to the tax authorities before the 15th day of the month following the payment.

WHT on dividends is payable to the tax authorities before the 15th day of the month following the payment.

Tax audit process

The tax authorities carry out audits of a selection of tax returns, usually at the taxpayer’s place of business. Audits may be carried out at any time prior to the expiration of the statute of limitations.

During tax audit, the tax authorities can access all the taxpayer data available on servers, terminals, and any supporting systems.

After examination of available information, the tax authorities issue a primary notice, and the taxpayer has 30 days after the date of reception of the primary notice to answer and submit its written objection to the tax authorities. A contradictory debate is organised.

When new elements are noted by tax authorities following the taxpayer's response and the contradictory debate, a second initial notification is given. This second primary notification is followed by another contradictory debate.

The tax authorities then issue the final notification accompanied with the perception title.

The taxpayer may request the opinion of the Tax Commission (CoFi) of not. 

If the taxpayer requests the CoFi's opinion, the taxpayer has 15 days from the notice of the final notification accompanied with the perception title to file the request. The CoFI will have 30 days to issue its opinion. After obtaining the CoFi's opinion, the tax authorities will issue the final decision within 60 days.  

If taxpayer does not request the CoFi’s opinion, the taxpayer has 30 days from the notice of the final notification accompanied with the perception title to file a claim to the tax authorities. The tax authorities have 60 days to issue their decision.

The decision of the tax authorities may be further appealed to the Court (State Council) within 30 days.

Statute of limitations

The tax limitation period is three years.  

Topics of focus for tax authorities

Areas where tax authorities usually claim adjustment are:

• VAT reverse on foreign services.
• Completeness of VAT output on revenue.
• Sales without invoices.
• Expenses without invoices.
• Employees' remuneration not subject to salary tax.
• Payment to non-registered suppliers.